venture - Wallenius Wilhelmsen Logistics

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NEWSLETTER ISSUE 4 2006
■ OUR TECHNICAL SERVICES OFFERING IN EUROPE 2
■ LOGISTICS CAPABILITIES OVERVIEW 3
EDITORIAL
A continent
on its way up
EUROPE HAS NOT BEEN the fastest
growing region in the world during
recent years. Even so, those of
us who have an insight to the
European vehicle industry knows
that this sector is more dynamic
than ever before.
IN THIS ISSUE OF VENTURE, Kai
Kraass, Head of commercial at
Wallenius Wilhelmsen Logistics
Region Europe, points out that
the current substantial growth in
the emerging auto markets of
Central and Eastern Europe can be
expected to continue right up to
2010. These growing markets will
require new logistics solutions.
We can also expect new imported
products on the European market,
maybe most notably from
China. Also the customers within
the heavy vehicles industry are
increasingly requesting more
complex logistics solutions –
solutions that we effectively help
them to realise.
DURING THE PAST YEAR, Wallenius
Wilhelmsen Logistics have
further integrated the network of
ocean routes, terminals, technical
sites and inland distribution in
Europe. We are more prepared,
than ever before, to transport finished
cars and heavy rolling
equipment from the factory to
the dealer, or anywhere in
between.
ANDERS
BOMAN,
HEAD OF
REGION
EUROPE,
WALLENIUS
WILHELMSEN
LOGISTICS
WHY EUROPE’S
AUTO INDUSTRY
WILL GROW
European economic output may have suffered a slowdown, but the
continent’s automotive industry is not showing any ominous signs of
stagnating. Kai Kraass, Wallenius Wilhelmsen Logistics’Vice President,
Head of Commercial, Region Europe, explains why.
1
PRODUCTION
MOVING EAST-
WARDS
Kai Kraass believes that
although mature markets
will see only marginal rises in sales, substantial
growth can be expected to 2010 in
the emerging markets of central and eastern
Europe. This growth will be fuelled by
the increased momentum of local auto
production for both domestic consumption
and export and the growing thirst
among consumers – from Russia to Rumania
– for cars.
“We already see these factors are beginning
to have a significant impact on the
future of the automotive market in Europe
1
as a whole, which naturally generates
major opportunities for all the players in
the logistics industry,” says Kraass.
The European automotive industry is
already huge with above 20 million units
(cars and light and heavyweight trucks)
being sold in western, central and eastern
Europe annually. And ever larger numbers
of vehicles are rolling off production lines
from modern state-of-the-art factories in
the central and eastern European nations.
“For automakers, their investments of
the past decade in emerging European
markets are beginning to show tangible
signs of paying off,” says Kai Kraass.
Continues on next page

WHY EUROPE’S AUTO INDUSTRY WILL GROW
2
RUSSIAN DEMAND
Sales of imported cars in
Russia jumped 88 percent
between 2003 and 2004, and
by 70 percent between 2004
and 2005. The full market potential is
underlined by the prediction from the Russian
Ministry of Industry and Energy that the
volume of the nation’s car market will grow
from today’s USD18 billion level to an estimated
USD31 billion or higher by 2010.
“More and more car makes will be produced
in Russia in the future, mainly for
domestic use initially, but ultimately also
for export in the longer run. Russian new
auto sales exceeded 1.5 million units in 2005
and we expect a more than 40 percent
growth through 2010, when the Russian
market alone will exceed two million units.”
“Against such a background, I am in no
doubt we are going to witness ongoing
growth in Europe’s automotive marketplace.”
“I am in no
doubt we
are going to
witness
ongoing
growth in
Europe.”
KAI KRAASS, HEAD OF COMMERCIAL REGION
EUROPE, WALLENIUS WILHELMSEN LOGISTICS
TECHNICAL SERVICES
■ PRODUCTION MOVING
EASTWARDS
– WE CONNECT EAST AND
WEST
“We are continuously
investing in our inland products,
such as inland distribution,
terminal services,
technical services and supply
chain management, to
offer enhanced logistic solutions
across the entire European
continent,” says Kai
Kraass.
“A certain trend will be
the need to cooperate more
closely with local partners in
order to develop best-inclass
products and increase
speed to the market. For
automakers, reduced
pipeline delivery times add
up to a beneficial squeeze
on inventory costs.”
Customers in the heavy
Ensuring the
perfect delivery
Wallenius Wilhelmsen Logistics
has strengthened and integrated
its inland activities across
Europe. This is how new vehicles
are prepared for the perfect
delivery to the end customer.
■ PUTTING VEHICLES ON THE ROAD
Before brand new vehicles that have come
straight from the factory can be put on the
road, some preparatory work is needed. In
addition to inland distribution, for which
WWL is also responsible, the vehicles
must, for example, have the protective
wax coating that is applied during manufacturing
removed. The paintwork must,
3
What about the rest of
Europe? Kai Kraass
remains buoyant about
the future, noting how
the Asian manufacturers especially are
ASIAN PLAYERS TO INCREASE VOLUMES
of course, be in perfect condition,
with no scratches or
dents. Employees of WWL
Technical Services ensure
that this is the case by checking
each individual vehicle
thoroughly and repairing any damage.
In the case of vehicles destined for car
hire companies, WWL Technical Services
fits the necessary accessories and
finalises the vehicles, so that customers
can put them into use in their hire fleets
straight away.
Last of all comes the pre-delivery
inspection, which involves testing all the
vehicle’s functions, including lights,
brakes, battery and optional extras. Only
when the inspection has been successfully
2
rolling equipment segment
are also offered a more integrated
product. “For example,
earlier this year we successfully
started distributing
equipment from factories in
Europe to the port of load
for one of our customers.
And we were also given the
task to manage the entire
operation through our supply
chain management system.”
■ RUSSIAN DEMAND
– WE HAVE ALREADY
GEARED UP
Wallenius Wilhelmsen
Logistics has geared up to
meet the Russian challenge
by broadening its traditional
operations beyond western
European ports, including
building a major new terminal
in the Finnish Baltic port
managing to increase volumes in Western
Europe. However, he stresses the real volume
growth will come from beyond the
traditional European markets.
OUR RESPONSE
ENHANCING THE NETWORK
of Kotka. The state-of-theart
handling terminal in Kotka,
which came on stream
last year, is designed for
customers seeking to
increase their trade into
Russia.
■ ASIAN PLAYERS TO
INCREASE VOLUMES
– WE WILL PROVIDE
ENOUGH TONNAGE
“The key for us will be having
the right tonnage available
in the right place so we
can offer both space and
precision in meeting the
growth and resulting
increased traffic flows. In
parallel, the total supply
chain must be enhanced,
linking ocean with terminal
and inland operation to
establish the most efficient
networks,” says Kraass.
completed are the vehicles delivered to the
dealer or customer by WWL.
■ READY FOR THEIR SECOND HOME
Technical Services plays an even more
important role in the case of used vehicles
that are being returned. The cars returned
to WWL by car hire companies after five to
seven months of use are sold on the used
car market. WWL takes full responsibility
Continues on next page

TECHNICAL SERVICES IN EUROPE
for refurbishing and distributing vehicles
which come both from at home and
abroad. This includes transporting the
vehicles from the car hire company to
WWL’s premises and, following refurbishment,
delivering them to the individual
dealers or auctions – one of WWL’s core
competencies. In order to ensure that these
vehicles reach their destination in perfect
condition, they are first valued and then
inspected for damage to the paintwork,
bodywork and interior equipment. After
any repairs have been carried out, the vehicles
undergo a final inspection.
LOGISTICS CAPABILITIES REGION EUROPE
GEARING UP IN EUROPE
Liverpool
Bristol
Southampton
Le Havre
Zeebrugge
Oslo
Zülpich
Stockholm
Gothenburg
Bremerhaven
3
Hakenstedt
Lage
Ötigheim
Kotka
Lehrte-Aligse
WWL has around 300 employees in five
locations, almost all of whom specialise in a
particular field, such as mechatronics, spray
painting or special equipment.
Wallenius Wilhelmsen Logistics has geared up the European logistics
network by adding new terminals, such as Kotka at the Russian border,
integrating inland acitivities across the continent and further developed
the ocean routes for both import and export of vehicles.
OUTBOUND ROUTES:
Europe – North America
Europe – Oceania (via US East Coast)
Europe – Oceania (via South Africa)
■ CONVERTING VEHICLES
FOR SPECIAL TASKS
WWL is not only responsible for ensuring
that new and used cars are in perfect condition.
The company’s engineers and technicians
also spend much of their time converting
both the bodywork and the interior
equipment of vehicles. This includes,
for example, equipping police vehicles,
which arrive at WWL in standard production
form and are then customised or fitted
with all the necessary equipment.
Vehicle signage is also one of a wide range
of services offered by the department.
INBOUND ROUTES:
North America – Europe
Asia – Europe
Ocean transportation
Ports Routes
Terminal services
WWL terminals
Technical services
WWL Technical
Sites (VPCs)
Inland distribution
Truck/Rail/Barge
Head offices
Central and
regional head offices